While institutional miners now use crypto mining warehouses, crypto mining started — and continues to be undertaken — out of miner’s closets, offices, garages, and basements. While anyone with a PC and an internet connection can mine crypto by downloading some software, you may want to weigh the pros and cons of undertaking a home-base crypto mining operation. Factors to consider include the costs (mining rigs and electricity) and your rationale for crypto mining at home: Is it mainly for the sake of fun and curiosity, or do you primarily want to make some money?
What You Need to Mine Cryptocurrency
There are generally three basic components to a mining operation: the wallet, the mining software, and the mining hardware.
You’ll need a wallet for your cryptocurrency to store the keys for any tokens or coins your mining efforts yield. Wallets have a unique address allowing you to send and receive tokens securely. There are many types of online wallets, and there are even “cold storage” wallets that don’t operate online. Decide which one is best for your needs before you start mining.
Most mining software is free to download and use and is also available for various operating systems. For popular cryptocurrencies like Bitcoin, you’ll find that multiple types of software can be used. While many of these options will be effective, slight differences could impact your mining operation.
Mining hardware may be the most expensive component of a mining rig setup. You’ll need a powerful computer, perhaps even one specifically designed for mining.
How Much Does It Cost to Build a Crypto Mining Rig?
It is possible to build a mining rig or purchase a prebuilt one with a much higher hash rate. The higher the hashrate, the more profitable mining can be.
Application Specific Integrated Circuit (ASIC)
An ASIC miner is a pre-built mining rig; these can be very expensive. For example, the Bitmain Decred Miner DR5 costs around $5,600.1 The DR5 has a much lower hashrate than many other miners—it mines at about 35 terahashes per second (TH/s). You can purchase higher-performing miners, but the price goes up significantly. The Bitcoin Miner S10 Pro mines at 110TH/s and costs about $5,900.2 From that point, miners are more than $10,000 with the Bitcoin Miner S19 XP Hyd. going for more than $19,800—but it has a hash rate of 255 TH/s.3
You can build a computer capable of mining cryptocurrency, but you’ll need specific hardware. Most graphics cards from Nvidia are capable of mining. However, some might not be fast enough to be worth buying for mining purposes.
The RTX 3090 Ti is one of the better graphics cards for mining. It costs about $1,700 and, depending on the mining algorithm, can hash up to 133 mega hashes per second (MH/s)—significantly less than one of the Bitcoin ASIC miners.4
It is possible to build multi-GPU mining rigs, but it can still take years to recoup your expenses and begin making a profit. Keep in mind that you may still be unable to mine crypto profitably on your own with a multi-GPU rig.
You’ll also need to purchase the additional hardware to build the computer, such as a power supply, motherboard, processor, memory, and drives. This might run you several thousand dollars, depending on the setup you choose.
It’s important to note that one mining rig, even the S19 XP Hyd., cannot outmine the mining farms and pools. The mining pool FoundryUSA accounts for roughly 23% of the Bitcoin network’s hash rate, about 47 EH/s—47 million TH/s.5 You’d need 183,313 S19 XPs to keep up with FoundryUSA.
Slushpool is one of the oldest pools in cryptocurrency. It hashes roughly 10 EH/s, significantly less than FoundryUSA, but still very fast.5 You’d need about 39,000 S19 XPs to compete with Slushpool’s hash rate.
So, unless you have the means to invest tremendous amounts of capital, you’ll likely need to join a mining pool to see any results.
Read More:What is a Hashrate?-How much Hashrate do you need to mine a Bitcoin?
Join a Mining Pool
Essentially, a mining pool is a group of miners who combine their computing power and work together to mine. They share the profits proportionally to the amount of work each address was able to contribute to the process. As you might expect, mining pools offer advantages and disadvantages.
On the one hand, the cost and effort associated with the initial setup are much lower than if you were buying an ASIC or building a multi-GPU mining rig. On the other hand, though, you’re likely to earn much less money from the process, as you’ll split any mining rewards with a group of people.
Weigh the Return on Investment
The process of mining remains an exciting and potentially profitable one. However, there are several pitfalls. For example, many miners have spent a lot of money setting up their rigs, only to find that they cannot recoup the costs with their mining efforts. Ensuring you are armed with as much of an understanding of the mining world as possible will help protect against this possibility.
There are websites created that can give you estimates of how much you’ll be able to generate using specific hardware. The operators of the mining pool NiceHash have put together an informative website that allows you to input your mining hardware and receive return estimates based on the equipment of users in their pool. This tool can help you determine whether you’ll generate enough from your hardware to pay for it and continue earning and how long it will take.
How Long Does It Take to Mine 1 Cryptocurrency?
It depends on many factors. On average, it takes 10 minutes for the network to create a new block and receive the reward of 6.25 BTC.6 The reward goes to the miner(s) that solved the block hash and is split up according to pool rules. Ethereum’s blocks are mined in a matter of seconds, with fewer ETH rewarded and split up among mining pools.7 With pools splitting rewards, it can take a significant amount of time to mine one full cryptocurrency.
Read More:How long does it take to mine 1 Bitcoin on a PC for benginer？
Is It Easy to Start Mining Crypto?
It is relatively easy to start mining, as most mining clients are installable and have graphic user interfaces. You can sign up at a mining pool, enter the mining address you’re given in your mining client, and begin mining.8
Can You Get Rich by Crypto Mining?
Mining crypto is very competitive due to cryptocurrency’s values. It was possible in the early days of crypto to mine several coins per year, but mining difficulty and competitiveness have increased so much that it is profitable only for those that can afford large-scale mining operations. However, making a few hundred dollars per month mining cryptocurrency is possible.
How much money can you make GPU crypto mining at home?
Mining crypto at home with a CPU is possible with coins like Monero, Zcash and Byte, but it will be a slow process and the cost of electricity may be more than the value of the coins you can mine. For those who want to get more serious, GPU mining is a realistic path. GPUs such as the NVIDIA GeForce RTX 3090 and GeForce RTX 3080 are popular options.
The price of GPUs range from as low as $600 up to $2000 and more. The reason for the price differential is all about performance. For GPUs this relates to their maximum hashrate. In simple terms, hashrate is the amount of power/speed/calculation that the GPU unit can apply to mining a cryptocurrency. The hashrate is expressed in ‘million hashes per second’. So 1MH/s is one million hashes per second. Lower cost GPUs typically have lower hashrates. CPUs on desktops and laptops have lower hashrates still, and are measured in thousand hashes per second as opposed to millions – so TH/S.
The hashrate and revenue calculation
Hashrates.com is an excellent resource for calculating potential earnings. It displays hashrates for both CPUs and GPUs and an estimate on how much one could make per month applying that hashrate to mining cryptocurrency.
For example, Hashrates.com says a GeForce RTX 3080 GPU can operate at 48MH/s and would earn $217 a month mining Ethereum. In comparison, an Intel i9-10900 can operate at 4KH/s and would produce around $9 worth of Monero over the same period.
Two other factors influencing profitability are:
- The market price of the coin you are mining. Cryptocurrency prices are highly volatile – so mining a crypto that is trending up will make you more money than one that is flat or trending down.
- The cost of electricity. A basic rule of thumb for a GPU is the higher the hashrate it can produce, the more electricity it will use. The price of electricity worldwide is measured in kilowatt-hours.
According to EnergyBot, the average price per kilowatt-hour in the U.S is currently 10.42 cents – but the price varies widely between states. The least expensive state is currently Nevada at 7.99 cents per kWh, and Hawaii is the most expensive at 31.92 cents. Worldwide, the lowest price electricity can be found in Burma, with many Arab states also offering very low rates.
Read More:Which is more profitable yield farming or staking?
How to scale up GPU mining – case study
The following case study was written by a professional GPU miner. In it they detail their real world experience in GPU mining on a more commercial scale.
The technology set
We have 13 desktops that are low cost Intel systems running Windows 10. The key here is finding motherboards that support 8 GPUs or more. Most run Z390 chipsets which are 8th/9th Gen Intel CPUs as the motherboards are readily available on Amazon.
Speed is irrelevant as some systems run Celeron and some Intel i9 but mining will be 100% GPU dependent so no difference in speed. This is the area where you can cut corners to save on costs. Windows is not stable with more than 8 GPUs running. We utilize Windows in order to remote connect to each rig on our phones with Google Chrome. We do not recommend running anything larger because of stability and also because you would need Linux. All rigs run in an open frame with 120mm cooling fans to dissipate heat. The GPUs will thermal throttle down if not cooled or housed in a case.
The profitability equation
Ethereum has proven to be the most profitable crypto to mine per wattage. For a low cost rig, 8 AMD RX580’s generate $20 per day before electricity. I recommended 8 – AMD 5700 XT’s because they use the same amount of electricity as the RX580s while generating 30% more profit
Electricity is your number 1 hurdle for profitability during a bear market. During a bull market it’s not really a factor. For example, the rigs above utilize $4 per day in electricity. During a bear market with all 13 machines operating, we were able to generate around $500 a month. During the current bull market the same 13 machines have done up to $17,000 per month – so the power price is not an issue. The problem with electricity is scaling and heat. The rigs use 1000 watts so they are essentially 1000 watt space heaters. The more rigs you utilize the more you will then need to cool your residence depending on your space and goals.